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Personality and pay: do gender gaps in confidence explain gender gaps in wages?

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  • Leonora Risse
  • Lisa Farrell
  • Tim R L Fry

Abstract

This study explores whether gender patterns in personality traits contribute to the gender gap in hourly wage rates, focusing on traits that reflect an individual’s confidence to take on a challenge. To capture confidence, we use a psychological measurement known as Achievement Motivation, which is dually comprised of ‘hope for success’ and ‘fear of failure’. This personality dimension is examined in addition to the Big Five personality traits and Locus of Control (LOC). Using 2013 wage data from the Household, Income and Labour Dynamics in Australia (HILDA) Survey, our Oaxaca–Blinder decomposition model reveals that men’s stronger hope for success, lower fear of failure and lower agreeableness contribute to the gender wage gap, while women’s higher level of conscientiousness is the only trait that serves to narrow it.

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  • Leonora Risse & Lisa Farrell & Tim R L Fry, 2018. "Personality and pay: do gender gaps in confidence explain gender gaps in wages?," Oxford Economic Papers, Oxford University Press, vol. 70(4), pages 919-949.
    • Handle: RePEc:oup:oxecpp:v:70:y:2018:i:4:p:919-949.
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    JEL classification:

    • D91 - Microeconomics - - Micro-Based Behavioral Economics - - - Role and Effects of Psychological, Emotional, Social, and Cognitive Factors on Decision Making
    • J16 - Labor and Demographic Economics - - Demographic Economics - - - Economics of Gender; Non-labor Discrimination
    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials

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